The tighter government regulation should help return the industry to a normal market, Herrick said. But “normal” can be difficult to define.

“I don’t think healthy was 2008 and 2009, or even 2005 and 2006,” Herrick said. “Healthy is where homes are coming onto the market at a fairly steady rate and there are enough consumers up there who take homes off the market at a regular rate.”

In a normal market, houses stay on the market from 45 to 90 days, he said.

New Hampshire isn’t there yet, but it’s getting closer. The average number of days houses were on the market dropped 12 percent in 2013 to an average of 102 days, according to the New Hampshire Association of Realtors year-end housing data report. And the number has been consistently falling since 2011.

Another indicator of a normal market is when the federal government stops stimulating the market and steps aside to let it run on its own, Herrick said.

“We’re still on stimulation. The federal government is supplying money to the mortgage industry to help people buy at lower interest rates,” he said.

According to the Board of Governors of the Federal Reserve System, in the fourth quarter of 2013, the Federal Reserve had a total of $13,182,147 million of outstanding mortgage debt.

Since new compliance regulations governing home loans went into effect Jan. 10, many of the state’s loan officers have seen increased concern from potential borrowers who are worried they might not qualify now.

“I do get questions about it from consumers,” said Kim Riddell, senior mortgage planner at Regency Mortgage Co. “They want to know if it’s more difficult to qualify.”

But loan officers say the stricter regulations, put into effect by the Consumer Financial Protection Bureau, aim to protect homeowners and the housing market from experiencing the instability that led to the housing crisis, not prevent them from getting loans — and their early experiences are showing that most people who would have qualified before the new regulations can still get loans.

“There’s a lot of fear now that people are not going to be able to get mortgages, and that’s not the case,” said Melody Bergevin, a loan officer with Merrimack Mortgage Co.

Ability to Repay

Two main aspects of the regulations that mortgage lenders are required to adhere to are the “Ability to Repay” and “Qualified Mortgage” rules.

The “Ability to Repay” regulations require loan officers to determine whether borrowers can repay their mortgages throughout the life of the loan. That’s determined by adding up all the money the person owes (student loans, auto loans, property taxes, and any other expenses) and dividing that amount by their total monthly income.

The ratio to meet is 43 percent. Prior to Jan. 10, a ratio of from 45 percent to 50 percent was the norm, Bergevin said.

The 43 percent ratio isn’t set in stone, though. Lobbying efforts got the CFPB to relax the rule, said Rick Herrick, spokesperson for the Mortgage Bankers and Brokers Association and senior loan officer for Norcom Mortgage. For the time being, if lenders can prove somebody would have been able to get approval using the old guidelines, then they will be allowed to get approval now.

If the ratio was firm, the restriction could prevent qualified borrowers who can’t necessarily prove their ability to repay on paper from getting the loans they need, Herrick said. For instance, if an employable person is moving into the state but hasn’t yet found a job, he may not have the necessary documentation to prove ability to repay. People who may not meet the 43 percent ratio but have high-value assets would also be restricted.

“[The flexibility of the regulations] is all good news to the consumer and the economy,” Herrick said. “What’s happening now is regulators are working with the industry representatives to see what the side effects would be if they didn’t allow old guidelines to be semi-followed.”

The regulations also require lenders to verify ability-to-repay information with documentation. In the past, the profile of the loan and the automated findings were enough to determine a borrower’s standing. The requirement can slow the process of acquiring loans.

“There is a lot more time and energy that needs to go into every transaction, so you could look at that as a challenge,” Bergevin said. “But it’s also an opportunity to do the right thing.”

Qualified Mortgages

The other main regulation mortgage lenders are asked for follow Qualified Mortgage criteria.

“In the past, lenders will charge whatever fees they wanted to, and now the lender has to be very careful about fees they charge,” Bergevin said.

With the new regulations in place, up-front fees and charges cannot exceed 3 percent of the mortgage balance. In the past, that wasn’t the case, and borrowers were often surprised to owe much more than they were led to believe, Bergevin said.

Qualified Mortgages also protect borrowers from taking out loans with risky components, like interest-only payments and terms that are 30 years or longer. It helps prevent them from loans that, down the line, could become too pricey to pay back.

Mostly business as usual

Riddell and Bergevin said that for the most part, the process of securing a loan has been business as usual, because most mortgage companies have strict underwriting standards and Ability to Repay criteria.

One change Riddell has seen, though, is a tightening of the parameters of the Automated Underwriting System, which loan officers use to determine if the risk of offering a loan is acceptable.

“On some loans I have gotten an ineligible upfront, so I have to go in and tweak it, which means you might have to pay off and close a credit card account in order to qualify,” she said.

Riddell said that her company does lots of counseling up front to make sure borrowers feel comfortable about the mortgages they are taking out.

“More often than not, people do not want to push the envelope,” she said. “They’ve learned from past experience. We’ve always done a lot of the counseling up front.”

Changing federal regulations is nothing new, Bergevin said.

“They are always being tweaked and changed, and I think they probably always will be,” she said. “When you experience a trend in the market that has caused some issues, it’s addressed with new regulation. But the regulation is protecting the consumer. It’s actually a positive thing.”